Nigerian Oil Union Threatens to Shut Down Output

Nigeria’s main oil union is threatening to shut down output on Sunday if the government does not reverse its decision to end popular fuel subsidies.

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Africa’s biggest oil producer and most populous nation, Nigeria has been up in arms for four straight days in response to the government’s cutting a petrol subsidy, doubling of the price of oil for Nigerians to 150 naira ($0.93) per liter.

“PENGASSAN shall be forced to go ahead and apply the bitter option of ordering the systematic shutting down of oil and gas production with effect from … 0000 hours of Sunday January 15 (2300 GMT on Saturday January 14), if the federal government of Nigeria fails to yield to the popular agitation of Nigerians on her unacceptable approach to fuel subsidy removal,” the oil union said in a statement.

President Goodluck Jonathan is meeting with labor unions today in an effort to reach an agreement to put an end to nationwide strikes that have already pushed up global oil prices on worries over Nigerian supplies.

Though industry officials doubt that the unions will be able to stop crude exports completely, as much of production is automated and the country has crude stored in reserves, even a minor outage could have a significant impact on the economy.

Nigeria produces over 2 million barrels of crude a day. Crude exports to the U.S., Europe, and Asia provide Africa’s second-largest economy with over 90 percent of its foreign exchange revenues.

Unions say they will not end strikes until the government returns petrol prices to the previous rate of 65 naira. The government has said it will not yield, sticking to its decision to scrap subsidies from January 1. The national assembly has urged both the government and unions to back down without success.

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To contact the reporter on this story: Emily Knapp at staff.writers@wallstcheatsheet.com

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